Most Seattle firms comply with sick-leave law but startup flawed, study says

A year after city’s new mandatory paid sick-leave law went into effect, a majority of businesses are providing benefits to their employees, but the initial implementation was often confusing and time-consuming.

Those are the results of a small study conducted for the Seattle City Council by University of Washington researchers as part of a larger, ongoing follow-up survey of 550 companies to determine how well the law is working.

The study results were presented Wednesday to the council’s Health and Human Services Committee.

Business leaders, who opposed the legislation and fought in Olympia this past session to have it repealed, said they still don’t know what the cost has been to provide paid sick leave and whether it affects the competitiveness of Seattle businesses with those outside the city. And they weren’t sure the UW’s survey would get at that information.

“Does the law actually affect the number of people coming to work sick? Are Seattle businesses more competitive or less? How many days are workers actually using?” asked Josh McDonald, with the Seattle Restaurant Alliance, who called for a fuller analysis.

Councilmember Nick Licata, committee chairman and a sponsor of the paid sick-leave ordinance, said that in hindsight, the city should have given companies more time to adopt the new provisions. The rules implementing the ordinance weren’t completed until summer 2012, giving businesses just a few months to change their payroll and sick-leave tracking systems.

“Given that there wasn’t much lead time, I’m pleasantly surprised that most businesses have implemented the law without major disruptions,” Licata said after the hearing.

Seattle in September 2011 became the fourth city in the country to adopt mandatory paid sick leave. The ordinance, which took effect a year ago, requires businesses with more than four employees to provide paid leave to full-time, part-time and temporary workers. The law also applies to employers who are based outside the city but have employees who work in Seattle for at least 240 hours a year.

The paid leave may be used for personal or family physical- or mental-health care or for reasons related to domestic violence, sexual assault or stalking.

The UW summary of interviews with 24 businesses concluded that while many employers initially found the ordinance and its requirements confusing, most now knew what they needed to do to comply.

“Some people aren’t happy with it. They’re of two minds,” said Jennifer Romich, a UW associate professor of social work who is leading the evaluation.

“They know people sometimes get sick and shouldn’t come to work, but they’re also looking at it from the point of view of the business owner or payroll manager concerned about the cost and the hassle involved. And there are some philosophically opposed to government intrusion,” Romich said.

One unnamed large retail chain, with some stores outside the city and some part-time employees who previously received no benefits, said it chose to offer sick leave to all employees because of the complexity of tracking individual hours.

“It was going to become a nightmare,” Romich quoted the company’s human-resources manager as saying.

She said that national statistics show workers take two to four sick days a year on average. The Seattle ordinance requires allowing five to nine, depending on the size of the business.

Earlier this year, the Employment Policies Institute, which is partially funded by businesses, conducted its own survey of 300 companies in Seattle.

It found that 56 percent said the law would increase their costs of doing business. To make ends meet, the survey found, employers either required employees to pay more for benefits, reduced hours or cut jobs.

Some employers argued that sick employees in the workplace aren’t a big problem and that mandating benefits allows less flexibility to meet workers’ needs, said the institute’s director of research, Michael Saltsman.

“The vast majority of businesses already offer paid time off,” Saltsman said. “Requiring all of them to do so comes with a cost.”

Neither of the surveys had yet talked with workers. The UW team is now conducting those interviews and plans to present its findings to the City Council in March.